MIDWEEK REPORT: Bounced checks, lawsuits, zoning violations plague SWH lobster wholesaler
SOUTHWEST HARBOR, Dec. 20, 2023 - Lobsterman John Stanley thought MDI Lobster Co., the wholesaler who closed its business here last month, had made good on its final payments. “They paid all fishermen last week, so that ended okay,” Stanley told the QSJ.
That was before he tried to cash his check.
Along with other fishers, their final payment bounced. Some were owed thousands.
MDI Lobster, owned by Nicholas Sayre and Joseph DeBeck, has a robust trail of such unpaid debt, along with having to fend off enforcement action from the town, lawsuits from lenders and legal challenges from neighbors for their encroachment on their properties.
In October 2021, the Town of Southwest Harbor took MDI Lobster to court after it failed to meet conditions to comply with the code enforcement officer, who slapped a cease and desist order on the business for various violations.
The town took the action after several neighbors hired a lawyer whose complaints included that MDI Lobster failed to prevent encroachment onto their properties by the restaurant’s customers, various parking violations and MDI Lobster‘s use of loud freezers and other equipment not allowed. Guests of nearby inns complained about the noise.
On March 15, 2021, Spark funding LLC, doing business as Fundamental Capital, sued MDI lobster, Sayres and DeBeck in Rockland County, NJ, for failure to pay $1 million in receivables, as part of an agreement whereas MDI promised to turn over all revenues after $283,890 in sales, according to the court filing. “The Seller sold $397,446 of future receivables,” the plaintiffs asserted.
Pearl Delta Funding LLC sued MDI Lobster Aug. 21, 2020 in Nassau County, NY, claiming breach of contract.
Despite its history, the select board, on a motion by then member George Jellison approved MDI Lobster’s license for beer and wine on May 12, 2023. When Town Clerk informed the board that the applicant was using a separate entity, “Sayre DeBeck Holdings” for the license, member Carolyn Ball asked if the board should delay the approval. She was denied.
Stanley said he’s worried the bounced checks will make it more difficult for the property’s owner, Sheryl Harper, to find a replacement operator.
Lobster fishers are scrambling to find alternative buyers which will no doubt drive down prices.
FOOTNOTE: Several readers wrote to add businesses which are open in Southwest Harbor to my article about hoe active the town was in December.
It was never my intention to publish an exhaustive list of every business still open.
But readers put a word in for Tom Cat Tides on Clark Point Road, Rogue Cafe and, of course, Carroll’s Drug Store, which I assumed folks knew was open all winter .
Maybe the SWH Chamber of Commerce could use the past two articles as a springboard to promote it as the place to be on MDI to enjoy the fringe seasons.
Tom Cat Tides will close for the winter after Christmas the owner told me today. I wish Clark Point Café could be open all winter but those owners are exhausted. What a wonderful addition to SWH both those businesses are! I'd never heard of Rogue Café, is it the same as Rogue at the top of Carroll's Hill?